David, a Namibian resident, earns a salary of N$300,000 per year from his full-time job at a local bank. He also earned N$20,000 in dividends from a local investment and N$15,000 from a freelance consulting business he runs in his spare time. He made a contribution of N$25,000 to his retirement annuity. David wants to know his taxable income for the year.

The contributions made to the Social Security Commission (SSC) by both employers and employees are considered tax-deductible expenses. This means that the amounts paid towards SSC, which provides benefits such as maternity leave and unemployment insurance, can be subtracted from the taxable income of employees.

What is the purpose of the Income Tax Act in Namibia?

In Namibia, individuals who earn below N$150,000 per year are exempt from paying income tax. This threshold is part of Namibia's progressive tax system, where the tax liability increases with higher income levels.

In Namibia, which of the following types of income is generally exempt from tax?

A person (company, individual, trust and partnership) carrying on a taxable activity with a turnover for the past or future 12 month period in excess of N$500 000, must register for VAT.

The company tax rate for non-mining businesses in Namibia is currently set at 32%. This rate is applicable to the taxable income of companies that are not involved in mining activities or other special sectors that might have a different tax rate.

Employers in Namibia are required to deduct and remit PAYE (Pay-As-You-Earn) to the Namibia Revenue Agency (NamRa) on behalf of their employees.

Non-residents earning Namibian-sourced interest income must pay withholding tax.

One of the deceased estate executors first functions is to ensure that all taxes due and payable to the Namibia Revenue Agency (NamRA) are paid and all mandatory tax returns are submitted.